Budget Blog – School Choice Expanded Again, Education Funding Increased and Drug Testing For Government Assistance

MacIver Institute Budget Blog | May 20, 2015

[Madison, Wisc…] On Tuesday, the legislature’s Joint Committee on Finance (JFC) made several important education decisions in a 29-page omnibus package. After a full 11-hour day, the package was passed along party lines on a 12-4 vote at 1:27 a.m. and was chock full of both fiscal items and policy changes to the state’s K-12 system.

JFC altered Gov. Scott Walker’s original plan for funding K-12 public education. While Walker’s budget proposal called for a $127 million cut in the first year of the budget, members of Joint Finance voted to restore that funding. They also approved a measure to provide an additional $69 million in the second year of the budget. These increases in categorical aid would provide schools with $150 per pupil in fiscal year 2016 (FY16) and $250 per pupil in FY17.

The legislature would utilize an accounting trick to fund a large portion of the new spending. Under Walker’s proposal, the property tax cuts for calendar years 2015 and 2016 would be funded through the school levy tax credit with three distinct payments – one in July 2016 ($853 million), one in June 2017 ($106 million) and one in July 2017 ($747 million).

The JFC plan would move the June 2016 payment to July 2017 – making two separate payments of $853 million. That would put the original June 2017 payment into the next fiscal year, taking it off the books for this budget and “saving” $106 million in general purpose revenue.

JFC Republicans also showed their continued commitment to school choice through a number of items in the omnibus. On funding, the plan would make the Racine Parental Choice Program and the statewide Wisconsin Parental Choice Program mirror the current arrangement for public school open-enrollment.

This means that for any student in the two choice programs who transitions from a public school to a private choice school, the voucher amount would be taken from state generalization aid to the public school. However, the public school district would get to count the student for their revenue limits, and would keep the difference between the voucher and the per pupil generalization aid.

For example, say Anytown School District receives $10,000 per pupil in state generalization aid and the voucher amount per student for school choice is $7,800. If one of their students were to transition to a private choice school, the generalization aid would follow the student to pay for the voucher, but Anytown School District would keep the difference of $1,200 for as long as that student is enrolled in the choice school.

In the case that a student leaves a district receiving less general state aid than the voucher amount, other state aid would be used to cover the difference going to the choice school.

Under the plan, enrollment caps would be removed for each school choice program. However, there would be temporary limits on the amount of students a district can lose.

Currently, the Racine school choice program has no cap on enrollment, but the statewide program has a cap of 1,000 students. Under the new plan, school choice enrollment would be subject to a type of reverse cap. Starting in FY18, the statewide enrollment cap is effectively eliminated. However, each public school district, including Racine, may only lose 1 percent of its students to the Racine and statewide choice program each year. By 2028, the year after 10 percent of a district’s students can enroll in a choice program, all caps would be removed.

Demand for statewide school choice has grown quickly since its inception in 2013. A total of 2,415 students applied for the 2013-14 school year when the cap was set at 500 students. Just two years later, the number of applications has jumped 47 percent to 3,540 applications, and the cap has increased to 1,000 students.

The Republican plan would create a statewide special education voucher program in 2016. This program would be limited to disabled students who had already tried to transfer to a different school district under the open-enrollment program but were denied. The income eligibility requirements would also be waived under the special education voucher program, making it open to students of all income levels. Funding to private choice schools would start at $12,000 per student and then be tied to revenue limits.

Sen. Leah Vukmir (R-Wauwatosa) spoke passionately about the special education voucher program.

“This program gives hope to these families,” said Vukmir. “How can we turn our backs on families who believe their needs aren’t being met?”

To address public school districts blocking special needs students, the omnibus prohibits districts from denying open enrollment application on the basis of undue financial burden. Transfer amounts through open-enrollment would also be $12,000 per student.

The omnibus also includes a bold plan introduced by Rep. Dale Kooyenga (R-Brookfield) and JFC co-chair Sen. Alberta Darling (R-River Hills) to change the direction of some of Milwaukee’s lowest performing schools. A program called the Opportunity Schools and Partnership Program (OSPP) would be created for Milwaukee Public Schools (MPS) in which the Milwaukee County Executive appoints a commissioner to run a type of recovery program for failing MPS schools.

The commissioner would select one to three schools in the first year and up to five schools starting in 2017 to be handed over to the OSPP program. The program would select an operator to run the selected schools and attempt to improve outcomes. Existing staff at these schools would have to reapply for employment and the commissioner would have discretion over employment at the schools.

“The commissioner would be independent of the [MPS] school board,” explained Darling. “That is probably the most important thing this project offers. They [Superintendent and Commissioner] would both be free of the authority of the school board.”

The proposal received sharp criticism from Democrats, especially Sen. Lena Taylor (D-Milwaukee) who views the plan as an outside takeover of MPS. At one point, Taylor likened Kooyenga and Darling’s efforts as the “great white hope” and when referencing school funding said for years Republicans “have been raping the children of MPS.”

Rep. Kooyenga called that notion “sick” and was nearly brought to tears as he defended the program as a call to action.

“I’m tired of sitting in the intellectual world and having conversations,” invoked Kooyenga. “We need to do something. The kids are killing each other out there, the majority of them can’t read. Reform is what we need.”

More than one in three MPS schools failed to meet Wisconsin standards during 2013-14 academic year.

The omnibus plan struck a blow to those who would like see more authorizations of successful independent charter schools by rejecting the governor’s proposal to create a Charter School Oversight Board (CSOB). This board would have had the power to approve independent “2r” charter school authorizers that could establish charter schools statewide. However, the omnibus plan does adopt the governor’s proposal to allow high performing independent charter school to open one or more additional charter schools.

Private choice schools would be subject to an independent financial audit that would require submittal to the Department of Public Instruction (DPI). If there are concerns in the audit’s management letter that the auditor does not think is being addressed, the governing body of the school has to submit a remedy report to DPI. Schools must also submit a spending plan if reserve balances are over 50 percent of the amount of choice payments received in that year.

Under school accountability, school performance and improvement would not be measured using letter grades as proposed by the governor. Instead, the committee opted to approve a star-based system, rating school performance and improvement between one and five stars out of five. Schools that fail to meet expectations would be given one star out of five, and schools that significantly exceed expectations would be given five out of five stars.

As Sen. Erpenbach (D-Middleton) pointed out, poor performing schools will now be labeled as “astronomically challenged” instead of easy to understand A-F grades. For years there has been strong opposition from school administrators over the A-F grades because they fear the consequences of having their school labeled with a C, D or F.

The committee also agreed to delete the requirement of school boards to send a letter to parents concerning their district’s school performance rating.

A civics assessment requirement for high school graduation was also included in the omnibus package. Schools, including charter and choice schools, may not grant a high school diploma to a student unless they have successfully completed a civics assessment, starting in the 2016-17 school year. The assessment would include 100 questions similar to those that may be asked of individuals applying for U.S. citizenship. Students must correctly answer at least 60 of those questions.

The governing body of each school would be free to determine the format of the test and at what point in the school year the test be administered.

Alternative teacher licensure would require DPI to grant an initial teaching license for technology and technical education subjects. The individual must score at least 100 points based on a point system that includes at least 25 points based on experience in a technical field and at least 25 points based on instructional experience. Any individual granted a license under this new provision would not be required to hold a bachelor’s degree.

Earlier in the day JFC tackled another hot button issue: drug screening and testing for a number of Wisconsin’s welfare programs. The governor proposed such measures for the state’s Work Experience programs, childless adults on Medicaid and FoodShare, and for Unemployment Insurance.

The committee approved all four drug screening and testing provisions on the docket with some variations. For the state’s Work Experience Programs, which offer transitional jobs services and benefits for poor adults looking to become self-sufficient, the Department of Children and Families (DCF) would be charged with administering drug screens and tests. DCF would be given $500,000 over the biennium to cover the costs. On FoodShare Employment and Training, Joint Finance decided to go with the Assembly bill, AB 191, that is a more detailed approach to drug tests for the program’s able-bodied adults without dependent children.

Drug screening and testing for childless adults who are Medicaid participants was also approved, which would need a waiver from the federal Center for Medicaid Services. Lastly, drug testing for Wisconsin’s Unemployment Insurance program was adopted allowing the Department of Workforce Development to deal with many of the specifics.

Joint Finance still has multiple items left to vote on before the legislature as a whole takes up the amended two-year plan. The committee is expected to vote on portions of the budget for the Department of Health Services (including Medical Assistance), the Department of Safety and Professional Services and the Wisconsin Economic Development Corporation on Thursday.

That leaves the Department of Transportation and University of Wisconsin System budget to next week.

Continue to check MacIverInstitute.com for updates on the state budget as they come available, and don’t forget to like us on Facebook and follow us on Twitter for instant analysis of the policy proposals.